Tuesday, October 18, 2016

Cherokee Nation poured $6 million into defunct casino amendment; Oaklawn and Southland spent near $1.5 million

Posted By on Tue, Oct 18, 2016 at 3:46 PM

click to enlarge CRAPPED OUT: A $6 million investment proves a loser for Cherokee Nation.
  • CRAPPED OUT: A $6 million investment proves a loser for Cherokee Nation.
A new filing by Arkansas Winning Initiative Inc., the commitee formed to pass a constitutional amendment to allow three more casinos in Arkansas, shows that the Cherokee Nation contributed $6 million to the effort before the Arkansas Supreme Court last week disqualified the measure.

On the other side of the issue, the owners of two existing casinos in Arkansas — Southland Gaming in West Memphis owned by Delaware North and Oaklawn Racing and Gaming in Hot Springs — contributed together more than $1.37 million in roughly equal amounts in September to fight the amendment. That put their total investment near $1.5 million.

The amendment would have specifically authorized named private corporations formed by Missouri businessmen to operate casinos in Boone, Miller and Washington Counties. But they announced in the beginning that the Cherokee Nation, which operates casinos in Oklahoma, hoped to be the operator of a casino in Washington County.

Cherokee National Businesses LLC, based in Tahlequah, Okla., had previously put $1.4 million into the campaign. On Sept. 2, the Cherokee group contributed $4.6 million more.

That brought total contributions to the drive to $6.147 million. Through the filing date Monday, the committee reported spending $3.965 million, leaving $2.18 million unspent.

Of $2.47 million in spending in the most recent report, which covered the calendar month of September, $1.876 million went to Impact Management of Little Rock, a political consulting group, which reported spending $1 million on TV and radio advertising. Impact Mangement spent another $407,000 on direct mail advertising. The committee  also had $301,000 in legal fees.

The Arkansas Supreme Court killed the amendment Oct. 13 because it included a provision for sports betting, which is illegal under federal law. The sponsors had said the casinos didn't intend to offer sports betting at the outset, but included it should that option ever become available. 

Today's report is not a final report. There could be more contributions and expenses in the first two weeks of October. Ads were still running on TV after the court ruled.

The Committee to Protect Arkansas Values/Stop Casinos Now said in its report for September that it had raised an additional $1.425 million from the existing casinos and smaller contributions from a variety of entities related to the horse and dog racing businesses. A Mississippi casino, Isle of Capri, also contributed $20,000 to fight additional competition in Arkansas. The two Arkansas casinos had put in about $100,000 to start its legal opposition to the amendment, which proved successful.

Through the end of September, the anti-casinos campaign had raised $1.426 million and spent $1.096 million. Expenditures included about $931,000 in media advertising and $127,000 for direct mail. The report lists no expenditure line item for legal fees in the month or a direct payment to a consulting group, except a "reimbursement" of bookkeeping by the Markham Group for $28,111. A spokesman said more legal fees will be booked on next months' report.

UPDATE: The casino committee today asked the court to rehear its decision. It said the amendment did not authorize sports gambling, but might do so if it were to be enacted by the legislature. The potential conflict is not an "essential fact" for voters to consider, attorneys argued. They also noted that an existing exception from the federal law on wagering is parimutuel betting, such as is already offered at Oaklawn and Southland. In any case, the filing said, the amendment does not enact sports betting, only the legislature could do that.

In other reports:

The Committee to Protect Arkansas Values, formed with leadership of lawyers to fight the amendment to limit damage awards in nursing home lawsuits, reported an additional $173,000 in contributions, to push its total just over $1 million. Lawsuits to invalidate that amendment were successful, too. The group reported spending only $147,000 of its money through the end of September.


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